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How a Remainder Converts to a Remnant
By Richard E. Welch, SRPA, SRA, R/W-AC
Most right of way professionals understand that a
remainder is the land that is left after a partial taking
that still has its own highest and best use. So what
happens when the portion of land remaining is so
small or poorly shaped that it has practically no value
whatsoever? According to the Real Estate Dictionary
(7th Edition), it is then considered a remnant.
In the vast majority of cases, remainders remain
useful properties. While a minor portion of a site may
have been taken due to roadway expansion or other
public project, the remaining land can still be utilized
much in the same way as in the before condition.
Fortunately, only a small percentage of partial takings of
properties result in remnants that leave the remaining
property virtually worthless.
Imagine two sites that are zoned for commercial
use and located on adjacent corners. Both corners are
surrounded by land that is zoned for agricultural purposes.
Remainder becomes a Remnant – Example #1
This example contains two parcels– a north and south
lot. The north lot consist of 14,032 sq. ft. and contains a
restaurant, septic system and limited parking in front of
the building. The south lot measures 18,025 sq. ft. and
contains the main parking lot. Both parcels are zoned
for rural business by the county and permit small-scale
commercial retail businesses and personal services.
Combined, the two lots comprised 32,057 sq. ft. The
maximum building height is 30 feet, and the setback
requirement from the roadway is 30 feet with 50%
maximum lot coverage.
Value of the Remnant
It may be difficult to imagine how a portion of
land could have no value whatsoever. But the fact is,
the remnant does not have its own highest and best
use as a buildable site. As a result, it is usually sold
to a neighboring property owner or acquired by the
condemning authority pursuant to the applicable
uneconomic remainder legislation of the jurisdiction.
To demonstrate how land that was once valuable can
become a remnant, let’s look at two examples.
Satellite imaging shows the restaurant to the left (example #1) and
the residence to the right (example #2). State Route 20 travels east/
west and Avon Road travels north/south.
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R i g h t o f Wa y N OVE M B E R / D E CE M B E R 2009
On the northern lot sits the restaurant, septic system with drain
field and small parking area.
This example is the result of a partial acquisition by
the Washington State Department of Transportation
(WDOT). The larger parcel consisted of two lots located
at the southwest corner of State Route 20 and Avon
Allen Road in Mount Vernon, Washington. The two
lots are dissected by Railroad Street and have frontage
on both SR 20 and Avon Allen Road.
Restaurant in the After Condition
The WDOT acquired the entire northern lot of
14,032 sq. ft. and a portion of the southern lot measuring
726 square feet. In essence, the bulk of usable land was
acquired, including the restaurant, septic system, drain
field, and a portion of the adjacent parking lot. All that
remained was a section of the southern parking lot, which
had restricted access on one side (along SR 20) and only
50 feet of street access on the other side (along Avon
Allen Road).
While the take area in this situation was almost
half of the larger parcel, the size of the remaining land
is not the determining factor when classifying land
as a remnant. The deciding factor is the usability of
the remaining land. Since the land remaining was an
irregularly shaped lot with restricted access, there was
not enough lot area to construct a feasible commercial
enterprise.
The southern lot served as the main parking lot for the adjacent
restaurant.
It was estimated that the building would require
at least 2,000 sq. ft. and 28 parking spaces per code.
That would leave about 7,700 sq. ft. of land remaining,
and the county planners were doubtful that the septic
system and drain field could be accommodated in
that small space. Therefore, to achieve the original
commercial usage, additional land would need to be
acquired. Unfortunately, the surrounding land was
zoned for agricultural use, not commercial use. As a
result, acquiring additional commercial land was not
feasible.
In addition, there were sign and access restrictions,
and limited visibility for the potential commercial use
due to setback requirements. The remainder appeared
to be a misplaced commercial zoned parcel adjacent
to agricultural land. The only possible use would be as
assemblage to adjacent agricultural land.The feasibility
study concluded that the remaining land could not be
used for commercial purposes. With no highest and
best use for the remaining property, the result was
a remnant.
Feasibility Study
Typically, the highest and best use analysis would
determine whether the remaining property could
serve the same purpose as in the original use, which
in this case, was a restaurant. To determine whether
a restaurant on the remaining property was viable, a
feasibility study was conducted.
In this case, the remnant became nothing more than an empty lot
that ended up being used for parking!
N OVE M B E R / D E CE M B E R
2009
R i g h t o f Wa y
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Front of the residence before the taking.
Front of the residence after the taking.
When a Remainder Retains Value – Example #2
When a remainder retains its own highest and best use
after the taking, it is still considered to be a remainder. In
this example, a historical residence with adequate lot size in
the before condition remained a viable residential property
in the after condition.
On the same street as the first example, these two
parcels were part of a separate partial acquisition by the
WDOT. The site was zoned for a rural reserve, which
permits residential, seasonal roadside stands and lowdensity development.
The larger property consisted of two tax parcels located
on the southeast corner of State Route 20 and Avon Allen
Road in Mount Vernon, Washington. The two combined
lots contained approximately 3.5 acres (152,381 sq. ft.).
The western parcel fronts to Avon Allen Road and consists
of about ¾ of an acre and the eastern parcel fronts to SR
20 and Avon Allen Road and contains about 2.75 acres.
The historic residence, which was constructed in 1901,
was comprised of 1,595 sq. ft. of livable area within a twostory residence. The residence contained about ¾ of an
acre, or 32,670 sq. ft., and the commercial retail portion
was on 2 ¾ acres zoned for produce, parking, retail
buildings and seasonal roadside stands. For simplification,
we will address just the residential portion to demonstrate
why this remainder did not revert to a remnant.
Residence in the After Condition
The WDOT acquired about 14,670 sq. ft. of the
residential lot. This taking included approximately 90 feet
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of frontage along SR 20 from Avon Allen Road plus a strip
along Avon Allen Road of about 25 feet. The septic system
would require reconstruction.
It was determined that the residence in the after
condition would not be critically impacted. The first floor
area of 1,000 sq. ft. left approximately 17,000 sq. ft. for the
septic system and yard area. This is what typically happens
in a partial taking when the existing improvements remain
functional in the after condition with a smaller lot size and
usable improvements.
CONCLUSION
A remnant or leftover parcel is not buildable and has
limited utility. In essence, it does not have its own highest
and best use. A possible use for a remnant could be
storage, however, in many cases, this may not be a feasible
alternative for the property remaining. Following discussions
with the property owner, the state agency must determine if
the remainder has real value or utility. Ultimately, the final
decision will be a judgment call.
Richard E. Welch, SRPA, SRA, R/W-AC
With more than 30 years of experience,
Rick is a Certified General, Senior Real
Property Appraiser and President of Rick
Welch Appraisal, Inc.